Fraudsters coming to grief with Serious Fraud Office

Pair accused of conspiring to deceive fleeing Afghan evacuees, charges against former Oranga Tamariki employee over $2 million fraud, and former public servants sentenced over failed attempts to profit from Christchurch rebuild.

Fleeing Afghan evacuees duped

On 21 June, the Serious Fraud Office (SFO) reported it had charged two Hamilton men alleged to have taken advantage of Afghan evacuees looking to flee the Taliban, by seeking thousands of dollars in payment for evacuation services that were provided for free by the New Zealand Government.

The defendants, both of whom have interim name suppression, were arrested in Hamilton on Tuesday and appeared in Hamilton District Court on 21 June.

The SFO has charged the first defendant with conspiracy to obtain by deception, obtaining by deception, using a forged document, attempting to pervert the course of justice and obstructing an SFO investigation. The second defendant faces a charge of conspiracy to obtain by deception.

The SFO alleges that the defendants’ offending began in 2021 shortly after the fall of Kabul and withdrawal of US and NATO forces.

Immigration New Zealand and the Ministry of Foreign Affairs and Trade established a team to assist with the evacuation of eligible Afghan nationals from Afghanistan, including covering visa, transport and MIQ costs.

The SFO alleges the first defendant, who had close ties to the Afghan community and was familiar with the evacuation process, conspired with the second defendant to contact eligible people in Afghanistan and offer to organise their travel to New Zealand in exchange for payment.

The SFO alleges that both defendants knew there was no charge for the service yet sought more than $450,000 in total from evacuees trying to flee Afghanistan.

Both defendants have been released on bail and are next scheduled to appear on 13 July.

Former Oranga Tamariki employee charged

On 14 June, the SFO filed charges against a former Oranga Tamariki (OT) property manager for allegedly awarding more than $2 million of work to her husband’s construction company without OT’s knowledge.

Neha Sharma and her husband Amandeep Sharma face charges of obtaining by deception and money laundering. Mrs Sharma also faces charges of using a forged document. Mr Sharma appeared in Christchurch

District Court today. Mrs Sharma is currently in India.

The SFO alleges Mrs Sharma gave false references to secure her job at OT, where she was responsible for managing aspects of properties in the Canterbury region, including maintenance, upkeep and modifications.

Once in the role, the SFO alleges Mrs Sharma set up her husband’s company Divine Connection as a contractor, without declaring a conflict of interest.

Mrs Sharma is then alleged to have worked with her husband to ensure work was assigned to his company over other approved suppliers. They allegedly worked together to submit and approve invoices throughout 2021 and 2022, at no stage declaring a conflict of interest to OT. In total OT paid Divine Connection just over $2 million.

Money laundering charges faced by the couple relate to almost $800,000 which was transferred to overseas bank accounts in India. Proceedings are underway to ultimately return the funds to New Zealand.

The High Court has issued a restraining order over the couple’s properties in New Zealand upon application by the Commissioner of Police, pursuant to the Criminal Proceeds (Recovery) Act 2009.

“We would like to acknowledge the Police and Indian authorities for their swift action and assistance in securing the defendants’ assets, as well as the co-operation of Oranga Tamariki in the investigation,” says SFO Director Karen Chang.

The defendants’ next appearance is scheduled for 26 July 2023. A warrant has been issued for Mrs Sharma’s arrest but will lie in court until the next appearance.

Failed attempts to profit from Christchurch rebuild

Two people who corruptly attempted to profit from the Christchurch rebuild were sentenced on 06 July after being found guilty on Serious Fraud Office charges.

Former Canterbury Earthquake Recovery Authority (CERA) and Ōtākaro Limited employees Gerard Gallagher and Simon Nikoloff were sentenced at the Christchurch High Court today after being found guilty on corrupt use of official information charges in March.

Mr Gallagher was sentenced to 12 months’ home detention and 200 hours of community work. Mr Nikoloff was sentenced to seven months’ home detention.

In their roles at CERA Mr Gallagher and Mr Nikoloff were tasked with attracting investors to central Christchurch, including through connecting landowners with potential purchasers to facilitate and speed up the inner city rebuild.

The pair had access to official information including how much landowners were willing to sell for, what investors were willing to pay and what was planned for the city.

They used this information to secure a sale and purchase agreement for their own company and then try and set up private business deals through which they would personally profit by hundreds of thousands of dollars.

Mr Gallagher was later employed at Ōtākaro Limited and managed the team responsible for finding buyers for surplus Crown land.

While in this role, he used and disclosed commercially sensitive information about a developer’s plans for a multi-million dollar piece of Crown land in an attempt to broker a deal which would see him personally profit, at the expense of the Crown.

Ultimately the developer withdrew when Mr Gallagher’s offending came to light, leaving a large empty plot still undeveloped today.

“Despite being unsuccessful in their efforts, the offenders’ actions were corrupt and caused real harm to the city’s rebuild efforts,” said Serious Fraud Office Director Karen Chang.

“Their offending was particularly egregious given how much Christchurch had already suffered. They exploited their roles as public servants employed to help in its recovery.

“In emergency situations or during recovery the need to deliver funding urgently can mean reliance on high trust, quick distribution mechanisms, which are more vulnerable to exploitation.

“It is important that organisations have robust internal controls, particularly when administering public funds, and that these are considered at the outset.

“A reminder of the need for these controls is particularly relevant as New Zealand faces another post-disaster rebuild following Cyclone Gabrielle and the flooding.